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The Truth



OUR attention has been drawn to The Guardian editorial of 23 February 2015 titled “Forensic Audit of NNPC: Matters Arising. We are encouraged and hereby commend The Guardian Editorial Board for recognizing and acknowledging that the fantastic allegations hitherto made against the Nigerian National Petroleum Corporation (NNPC) by concerned but uninformed citizens have turned out to be “unfounded,” as the paper aptly put it. Within a period of six months, NNPC operations have been subjected to close scrutiny both by the Senate of the Federal Republic and by an international audit firm, the PwC which carried out a forensic examination of these claims.

   Both bodies returned a verdict of not guilty to the Corporation.

  We are however constrained to express our deep disappointment over the conclusions reached by the said editorial, even after acknowledging that the NNPC was being unjustly defamed by its traducers. What baffles us is that The Guardian could go ahead to disregard NNPC’s follow-up explanations regarding the balance of $1.48 billion signature bonus which the audit firm recommended should be remitted to the federation account. We are puzzled why The Guardian, known for its objectivity and rigorous analyses of issues in its editorials, would claim that the fact that the funds were unremitted at the time of the audit examination amounts to an indictment of the NNPC and proves that the organization’s operations are opaque.

   To restate our earlier advertised position on the issue, following the release of the PWC report, NNPC accepted that there is indeed an outstanding balance and pointed to the fact that the PWC report clearly indicated that the $1.48billion in question were not funds realized from crude oil sales but outstanding balance of the signature bonus on assets assigned to its upstream subsidiary, the Nigerian Petroleum Development Company (NDPC) when Shell divested its holdings. We went further to disclose that the Department of Petroleum Resources (DPR) presented NNPC with a bill of N1.847bn as the book value of the assets left behind by Shell – which is what signature bonus is all about. NNPC however objected to the parameters used for computing the book value of the assets, particularly as they were not new fields.

  We also explained that, to show its commitment to acquiring the assets, NNPC went ahead to pay an initial deposit of over $300m for the assets, which brought the balance down to the $1.48bn that the audit firm recognized in its report. We are surprised that The Guardian expected NNPC to expedite payment of the full amount on this transaction even when the parties had not reached a common ground on the actual book value of the assets. Why The Guardian believes that NNPC’s case with regard to the signature bonus on the divested assets should be different from any other kind of business negotiation is very difficult to understand. This is why we are inclined to view as ridiculous and incomprehensible, The Guardian’s conclusion that the delay in reconciliation and payment must have been borne out of NNPC’s desire not to pay the outstanding sum.

   Finally, the operations of the NNPC cannot be said to be opaque, as claimed by The Guardian, when various aspects of the Corporation’s business are routinely examined by government agencies such as the Federal Inland Revenue Service, the NEITI, the Upper and Lower Chambers of the National Assembly, and by independent external auditors. We must say that hiding under a spurious charge of opacity against NNPC in order to hang a non-existent indictment on the Corporation flies in the face of the two latest independent examinations of its operations – by the Senate as well as the PwC forensic audit – and the clean bill of health handed by these independent bodies.

     The Guardian is a respected journal that has established a reputation as a newspaper with a conscience. It is troubling that this editorial goes against the grain, thereby tending to create the impression that there are individuals who find it challenging to overcome their personal prejudices to face the truth that the PwC forensic audit report did not indict NNPC.

 • The above is NNPC’s Right of Reply to the February 23, 2015 Editorial of The Guardian.

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